Reverse Mortgages: An Important Financial Tool
Wednesday - October 28, 2009
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There are many factors in today’s society that have made reverse mortgages more popular-and more necessary. People are living longer than ever before and spending more time in retirement. At the same time, they tend to underestimate their retirement savings needs.
“When it comes to retirement, you need to be ready for anything and everything. A reverse mortgage can help many people remain in their home, be more financially independent and live a more fulfilling life,” says FORMTEXT Percy Ihara, CSA, reverse mortgage consultant for MetLife Bank.
Reverse mortgages: the facts
So, what exactly is a reverse mortgage? Simply put, it’s a loan that allows homeowners aged 62 or older to tap into the equity that’s been built up in their home. The homeowners can then use the proceeds in a variety of ways-such as covering monthly living expenses, making improvements to the home or paying for prescriptions and healthcare.
There are other important benefits as well: * The borrower continues to own and live in the home-even if one of the co-borrowers passes away.
* No repayment is required until the borrower sells the house or does not live in the house for more than 12 months. When the house is sold, the loan is repaid along with accrued interest. If the borrower leaves the house for more than 12 months, such as for a stay at a nursing home facility, then the loan also becomes due.
* There are no monthly payments required. Of course, the homeowners must continue to pay property taxes, have homeowners insurance and maintain the home-but the proceeds from the reverse mortgage can be used to pay for these routine expenses. And while the funds received from a reverse mortgage do not impact regular Social Security or Medicaid benefits, certain needs-based benefits, such as Medicaid and Supplemental Security Income (SSI) may be affected. Prospective borrowers should contact their tax professional about their specific situation.
* A prospective borrower can still qualify, even if he or she is still paying on a conventional mortgage. The proceeds from the reverse mortgage will be used to first pay off the existing mortgage.
* Closing costs can be rolled into the reverse mortgage itself, so there’s no immediate financial impact to contend with.
* Borrowers have a choice of how they receive their proceeds, based on their needs and preference. They can choose: - A single lump sum payment
- Monthly income for as long as they live in the home, or, if they prefer, for a specified period of time
- A line of credit they can draw on as needed
- Any combination of these options
MetLife Bank offers free, educational materials, including a comprehensive information kit and video to consumers who may be interested in taking a reverse mortgage or would like more details. For more information about a MetLife Bank reverse mortgage, contact me at FORMTEXT 368-6747 or from the outer islands toll-free at 1-866-369-6747.
“A reverse mortgage can make all the difference, and help you to live better today and be more prepared for the future,” notes Ihara.
All loans arte subject to property approval. Certain restrictions may apply. Mortgage financing provided by MetLife Bank, N.A., Equal Housing Lender. © 2009 METLIFE, INC L0309027190[exp0310][All States][DC]
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